The proposed bill, if enacted, would amend current statutes related to escrow agents by adding a new section (6-834.01) that specifies the conditions under which escrow agents may use funds in an escrow account. Currently, the law does not explicitly outline these conditions. The new provisions would restrict the use of escrow funds to making payments as per the loan agreement, unless certain exceptions are met. These exceptions include stipulations in the loan agreement or deed in lieu of foreclosure that allow for alternative uses of the funds, agreements to negotiate a settlement that includes provisions for fund usage, or agreements to use a portion of the escrow to address arrears.

Overall, the bill aims to clarify and tighten the regulations governing the disbursement of escrow funds, ensuring that they are primarily used for their intended purpose unless explicitly stated otherwise in the relevant agreements. This change seeks to enhance the accountability of escrow agents and protect the interests of the parties involved in the loan agreements.

Statutes affected:
Introduced Version: 6-834.01
House Engrossed Version: 6-834.01